#Liquidity101 cryptocurrency, liquidity refers to how quickly and easily an asset can be bought or sold without causing significant price changes.

Assets with high liquidity—like Bitcoin or Ethereum—have plenty of active buyers and sellers, allowing for fast trades at stable prices. In contrast, low liquidity can lead to price slippage and slower order execution.

Centralized exchanges (CEXs) typically provide higher liquidity due to their large user base and trading volume, while decentralized exchanges (DEXs) may have lower liquidity, which varies by trading pair.

For traders and investors, liquidity is a key factor, as it directly impacts how efficiently and cost-effectively they can enter or exit positions in the market.